Top 10 Good Personal Finance Habits everyone must follow

Have you always been able to spend money on everything you have desperately desired? Or do you ever remember being courageous enough to spend all your money in one go? I bet the answer is ,”No. I am sure I am not that carefree”.
The solution to these problems is not making more money but developing the habits which will enable you to live life on your own terms. It is always possible to be content and plan your life according to the amount of money you already have. Remember the concept of pocket money? ( So little for so long.) And how you would complain about the money not just being enough? But you did manage. Somehow. You managed to successfully tread this first step towards handling finance.
You had your personal goals, and then you managed to use your pocket money to accomplish those goals. But there were problems like you weren’t aware of how to manage your money, and non-availability of money for the right job or at the right time. Finances are to be dealt with carefully. It’s not your salary that makes you rich, but your spending habits. And it is really important to imbibe good finance habits because all bad habits start slowly and gradually and before you know you have the habit, the habit has you.

HERE are the top 10 good personal finance habits you should be learning, just to ensure you have the right amount of money, at the right time.

10. TRACKING INCOME AND EXPENSES

This is the most important step for money control. Tracking income and expenses means to observe and analyze how much money you are making and how much money is being spent by you. You need to strike a situation of balance between the two at all times. Any situation where expenses are more than the actual income is not ideal. By keeping a track , you will be more aware of where your money goes, and also be able to set up an efficient budget for future spending. It is similar to keeping separate books under the same category, knowing where to adjust the entries according to the nature of the transaction. Tracking income and expenses prevents financial stress.

9. BUDGET

A budget serves as an essential management tool. It gives you the estimate of the amount of money you will spend on various activities. For example, if you are planning a household budget, it will tell you about the estimated expense on categories like groceries and clothes. In this way you can be held financially accountable. A budget helps you to prepare for long term goals, and provides assistance in working towards them. Preparing a budget is like a good habit you need to inculcate within yourself if you aspire to become financially independent and sound. A budget tells your money where to go instead of wondering where it went. It lets you know that you need to “act your wage.” You need to control your money, because making more money will not help and you will just have bigger bills.

8. SPENDING MANTRA

To be financially happy, you need to have your own personal spending mantra. When you confront a possible area of expenditure, you need to ask yourself, ” Is it necessary?”, ” Can I afford it ?”, “Have I checked at any other place where I can find it at a cheaper cost ?”, and if the answer is NO, you don’t need to spend your money on that particular area. You need to remind yourself every time that if you don’t love it or find it worthy, you will leave it and let it go. Wait before you splurge because how you spend your day is how you spend your life. Every craving you get is a drawback when it comes to achieving your long term goals. Don’t be pressurized to spend and don’t let anybody define how you spend your money, because in the end, it is only your money!

7. AVOID OVERSPENDING

” Half of the problems in this wold can be traced to saying yes too quickly , and no not soon enough.” – Josh Billings

You should be careful when it comes to actually spending your money. It is important to know your money’s worth . You need to be aware that you are overspending when you are buying what you don’t need , and are being extravagant with your expense. It is a requirement for you to shield yourself from the triggers with compel you to sabotage your budget. If you are job hunting or you just hit a jackpot, it is very easy to be fooled into this urge to spend, and more than often, you tend to overspend. To build this shield, you have to stick to your budget plan and keep your future goals in mind .

6. NEGOTIATING

Negotiating is one of the most common concept which we all have used or witnessed in the quotidian routine . In business and in life , you don’t get what you deserve , you get what you negotiate . Negotiating is all about striking a deal which will benefit your interests as well as the interests of the party you are transacting with . You must never try to make all the money involved in a deal , and should allow the other person to make some as well. Because if you maintain a reputation of always making money , you will not be able to have many deals . Learning negotiation skills and tactics will help you improve in your game . Always know that the quickest way to double your money is to roll it back and keep it in your pocket .

5. AVOID LOANS

Even though credit cards , mortgage loans , student loans are a virtual necessity of all the customers today , such debts and loans should be avoided . Pay with cash whenever it is possible and stay within your means . Don’t believe you can buy something , if you can’t afford it . If you can’t afford something , you just don’t need it . Impulse purchasing shouldn’t be practiced . Adopt the policy of “Buy now , pay later ” and shun borrowing for as long as possible . This saves you from financial and psychological stress . A big part of financial freedom is having your heart and mind free from worry about the *what-ifs* of life .

4. SHOP WITHOUT YOUR CREDIT CARDS

You must be aware of how nowadays it is not about who wears the pants, but who holds the credit cards in a family . A credit card is a lot of fun only until you get the bill . The main reason which causes credit card debts is the reckless use of credit cards . If you happen to use a credit card , avoid charging more than you can afford . Credit cards include a lot of paperwork and high interest rates . To be able to use a credit card , you should be able to use it wisely and responsibly . A credit card is not wisely handled , costs money , tempts you to overspend , ties your future income and creates a lot of losses. It is also susceptible to forgery . Credit cards are the cause of the majority portions of debt , and debt is the worst kind of poverty .

3. SAVING

” Save money , and money will save you .” You have not earned any money , unless you have saved it . Saving is the most essential financial habit . It speaks only one common language :” If you save me today , I will save you tomorrow.” Always exclude some amount of money which is to be saved from your budgetary plan . By saving money , you can be better prepared for future emergencies and will be able to spend more wisely . Saving money protects you like a cushion . And also keep in mind this famous quote : A penny saved is a penny earned (Benjamin Franklin ) .

2. STICK TO YOUR SHOPPING LISTS

Human nature is very easily frenzied . In order to be wise with your money , you should stick to and adhere by your shopping lists . This avoids any kind of distraction and impulse purchasing . The more you tend to be distracted , the more you loosen control over your money . You should be able to name your priorities and track your regular expenditure . Remind yourself regularly about your financial goals and don’t spend more than you can earn.

1. LIVE WITHIN YOUR MEANS

Don’t go broke trying to look rich . You should always know what your limits are . This means , spend less than you earn and you can till lead a comfortable life , being fiscally responsible . Evaluate your lifestyle and know your numbers. Living below your means can help you build wealth, reduce stress, create options and find what is really important to you. Managing your money means , not allowing your money to manage you . Keep your needs simple and enjoy small pleasures . It is not the things that matter but the value they hold .